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Tories would require more transparency for investment management fees – Investment Executive

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The pledge fell within the banking portion of a section dedicated to lower prices for consumers. Under leader Erin O’Toole, the Conservatives would also order the Competition Bureau to investigate banking fees and legislate open banking “so that Canadians can connect with fintech companies that can provide a better offer for banking services such as a mortgage, line of credit or credit card,” the 164-page document said.

Reports from financial industry regulators have found that most Canadian investors don’t understand what they’re paying in investment fees. Last month, the Mutual Fund Dealers Association of Canada  said that expanded cost reporting that specifies investment fund charges should be included in fee summaries.

The Tories are also targeting “an unaccountable and overly aggressive” Canada Revenue Agency (CRA).

“It seems like every day brings new stories of CRA overreach: denying disability tax credits to people with diabetes, refusing benefits to single mothers because CRA is not satisfied with proof of separation, and auditing small businesses for tiny amounts while writing off large amounts owed by multinationals,” the platform said.

The Conservatives would impose a duty of care on the agency and revise the penalties so that first-time “problems or errors” receive minor fines. The party would also require the CRA to report on the tax gap so that resources could be devoted to problem areas, and increase funding to go after “wealthy tax cheats” and large corporations.

The NDP pledged to boost funding for the CRA and close certain tax loopholes.

For Canadians with disabilities, the Conservatives would reduce the number of hours
required to qualify for the disability tax credit (DTC) to 10 from 14 hours per week. The change would make it easier to access various programs and benefits for which the DTC serves as a gateway, the document said, including the RDSP and the child disability benefit.

The Tories would also double the disability supplement in the Canada workers benefit to $1,500 to help lower-income disabled Canadians. The plan would save a disabled person made eligible for the tax credit (or their family) an average of $2,100 per year, according to the platform.

The Liberals have proposed a Canada disability benefit modelled on the guaranteed income supplement (GIS) as well as changes to DTC eligibility. The NDP has promised a guaranteed livable income for  Canadians with disabilities, as well as seniors.

As part of a plan to make housing more affordable, the Conservatives would encourage investments in rental housing by allowing those who sell a rental property and reinvest in rental housing to defer the capital gains tax.

The Tories also said they’d ban foreign investors not living in or moving to Canada from buying homes for a two-year period. A Conservative government would instead encourage foreign investment in purpose-built rental housing. The policy would be reviewed after two years. The NDP would introduce a 20% foreign buyer’s tax on homes, while the Liberals have proposed a 1% annual tax on the value of vacant real estate owned by non-residents.

The Conservative platform also had proposals to encourage more seniors to age in their homes. The home accessibility tax credit would change to $10,000 per person (rather than $10,000 per dwelling), and seniors and their caregivers would be eligible to claim the medical expense tax credit for home care. The party would also create a Canada seniors care benefit of $200 per month per household for anyone living with and caring for a parent over 70.

The platform has been costed internally and is being reviewed by the parliamentary budget officer, the Conservatives said.

Other measures from the Conservative platform include:

  • doubling the Canada workers benefit to a maximum of $2,800 for individuals or $5,000 for families and pay it as a quarterly direct deposit rather than a tax refund at year-end;
  • no longer requiring underfunded pension plans to convert to annuities, which can lock in losses;
  • creating the Canada investment accelerator, a 5% investment tax credit for capital investment made in 2022 and 2023, with the first $25,000 refundable for small business;
  • supporting gig economy workers ineligible for employment insurance (EI) by requiring gig economy companies to make contributions equivalent to CPP and EI premiums into a new, portable employee savings account every time they pay their workers. The money would grow tax-free and could be withdrawn by the worker when needed;
  • converting the child care expense deduction into a refundable tax credit covering up to 75% of the cost of child care for lower income families;
  • a one-month “GST holiday” this fall to help hard-hit retail stores recover; and
  • eliminating the deficit, which hit $354 billion in 2020-21 as the federal government handled the Covid-19 crisis, within a decade.

Read the full platform on the Conservative Party website.

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Economy

S&P/TSX composite down more than 200 points, U.S. stock markets also fall

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TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.

The S&P/TSX composite index was down 239.24 points at 22,749.04.

In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.

The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.

The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.

The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.

This report by The Canadian Press was first published Sept. 6, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 150 points, U.S. stock markets also higher

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TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.

The S&P/TSX composite index was up 171.41 points at 23,298.39.

In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.

The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.

The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.

The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.

This report by The Canadian Press was first published Aug. 29, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Investment

Crypto Market Bloodbath Amid Broader Economic Concerns

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The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.

The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.

Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.

The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.

Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.

Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.

Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.

Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.

The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.

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